Supreme Court, led by Chief Justice DY Chandrachud, investigates alleged privacy breaches by major foreign credit information companies like TransUnion CIBIL, Experian, Equifax, and CRIF High Mark.
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NEW DELHI: Recently, The Supreme Court of India, led by Chief Justice DY Chandrachud, along with Justices JB Pardiwala and Manoj Misra, recently addressed a significant legal plea regarding the alleged privacy breaches committed by four major foreign credit information companies. These entities, identified as TransUnion CIBIL, Experian Credit Information Company of India, Equifax Credit Information Services, and CRIF High Mark Credit Information Services, are accused of handling sensitive financial data of Indian consumers without proper consent.
Despite the absence of a representative for the petitioner, the Court proactively issued notices to several pivotal governmental bodies including the Ministry of Finance, the Reserve Bank of India (RBI), the Ministry for Electronics & Information Technology, and the Ministry of Home Affairs, demanding a thorough explanation of their involvements and oversight regarding this matter.
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The Court also appointed Advocate K Parameshwar as amicus curiae to assist in this complex case. Reflecting on the seriousness of the allegations, the Court stated-
“In absence of any appearance, a notice is issued. Considering the raised issues, an amicus curiae is appointed, with Advocate K Parameshwar taking the role. The petitioner, who is representing themselves, will be informed of this current order.”
The heart of the petition lies in the claim that these companies, presumably in collusion with the RBI and Central ministries, are engaging in activities that severely infringe upon the privacy rights of more than a billion individuals and numerous business entities within India. The petitioner vehemently argued against the principle of data localization being compromised, as crucial data servers and storage facilities of these firms are stationed outside the Indian jurisdiction, which poses a significant threat to data sovereignty and privacy.
Highlighting the misuse of data, the petitioner stated-
“Respondents 5, 6, 7 & 8 clandestinely gather the aforementioned sensitive data from banks, financial institutions, and other sources, without customers’ knowledge or consent. They then repackage this confidential information and offer it for sale to their members, including domestic and international lending institutions, as well as the general public, profiting immensely from these illicit activities.”
Furthermore, the petition shed light on the unethical dimensions of the operations carried out by these firms, which allegedly include partnerships with entities such as Bank Bazaar, Paisa Bazaar, My Loan Care, Loan Adda, and Credit Mantri. These alliances purportedly help cultivate a “parallel underworld economy,” thriving on the credit scores and histories produced by these companies, which have far-reaching implications on the financial and social standings of individuals.
The petition poignantly emphasized how the derived credit scores and histories are used to categorically discriminate and marginalize citizens.
It stated-
“Utilizing credit scores and credit history, Respondents 5, 6, 7 & 8 exert significant influence over the entire Indian banking system, determining access to credit facilities. Individuals with low credit scores face financial paralysis, hindering their ability to achieve meaningful progress and potentially harming millions of honest entrepreneurs. Such practices undermine the well-being of citizens and the broader interests of our country.”
In response to these serious allegations, the petitioner has requested the Supreme Court to direct the RBI and relevant ministries to enforce stricter regulations on data sharing and ensure compliance with the Credit Information Companies Regulation (CICR) Act, 2005, to safeguard the fundamental rights of privacy for all Indian citizens.
CASE TITLE:
Surya Prakash v. Union of India and Others
